Is Nike slowly removing themselves from the wearable technology market? The answer is somewhat unclear. According to recent reports, 55 of the 70-member Fuel Band team, in charge of the information-gathering watch, were laid off. According to more recent reports (including Nike's own), however, the swoosh company will remain in the market, but perhaps in a reduced role.
"Nike is committed to broadening the use of NikeFuel through collaborations with industry leaders to create smarter products and services," Nike VP of Digital Sport Stefan Olander said in a statement responding to reports that they weren't (committed to broadening..).
Even so, the significant layoffs mean Fuel Band isn't meeting expectations in its current form, which is a futuristic band ($149) that tracks all movement, not just those done in structured exercise. Some of its challenges, as laid out by redcode.net, are that it is expensive and difficult to manufacture, making profit difficult. Plus, the device doesn't have an Android app.
Some also aren't exactly sure how to apply the data Fuel Band accumulates.
"They are getting a lot of data and just do not know what to do with it," a source told redcode. "They could not exploit the market."
The significant departmental downsize combined with Nike's insistence that they won't abandon the product could mean they might focus instead on software over hardware. Given the number of other companies in the market -- and the number of companies attempting to break in such as Apple -- the move might help profit margins.
"We will continue to leverage partnerships to expand our ecosystem of digital products and services, using NikeFuel as the universal currency for measuring, motivating and improving," the company said on Friday.
